1. 17TH CHINA INTERNATIONAL FAIR FOR INVESTMENT AND TRADE: 8-11 SEPTEMBER 2013
INVESTMENT AND TRADE OPPORTUNITIES IN ZIMBABWE WITH FOCUS ON ALLIED TIMBERS ZIMBABWE (PRIVATE) LIMITED By
Dr Joseph Kanyekanye
Group Chief Executive Officer – Allied Timbers
&
Chairman – Timber Producers Federation of Zimbabwe
Website :

2. Presentation Introduction Zimbabwe Reloaded Forecasted GDP Growth
Forecasted Sectoral
Areas of Competitive
Advantage
What we seek
Allied Timbers
Opportunities
Thanks

3. Introduction Stability and political unity since 2009
Resource rich country with arable land PLUS agric/industry link
Education – unquestionably Mugabe legacy
GDP growth averaging 7% in last 2 years
“The arm of commerce has borne away the gates of a strong city, oceans no longer divide but link” Frederick Douglas
Constraints – I refuse

4. Zimbabwe Reloaded
Gold reserves estimated at $billions but currently producing 12mt per year but capacity to do 50mt/year exists
Abundant Nickel under care but can produce tonnes
Second largest PGM in Zimbabwe worth $400billion. 4 projects on feasibility stage.
Abundant coal reserves at 2.7 million tonnes production/year
Chrome production rose 167% in 2010 to t.
Zimbabwe Kimberlitic diamonds at 4 million carats and alluvial reserves can account for at least ¼ of world production
Manufacturing recovery
One stop shop
CZI as a partner: invitation, co-operation agreement, enhance trade

5. ZIMBABWE FORECASTS % p.a. 2011 2012 9,3 7 6 13 10 GDP Growth
Inflation – end year 6
Interest Rates (USD) 13 10
Source: Hawkins 2010

6. ZIMBABWE SECTORAL GROWTH
% p.a.
2011
2012
Agriculture
25.0
15.0
Mining
45.0
55.0
Manufacturing
9.5
12.0
Distribution
8.0
10.0
Tourism
6.0
Source: CZI2011

7. Key areas of competitiveness in Zimbabwe
Clothing and textile industry
Agro-Processing
Chemicals & Tourism
Manufacturing - Food
Pharmaceuticals
Metals and Minerals
Technology
Wood and furniture

8. WHAT WE SEEK INCREASED 2 WAY TRADE: HUNT IN PACKS
WIN – WIN RELATIONS WITH THE ADVENT OF GLOBALISATION – INTERNATIONAL INVESTMENT
HASSLE FREE BUSINESS FREE OF TOO MUCH REGULATION
“LOOK EAST’ INVESTMENT THINKING
INVITATION TO ZIMBABWE INDUSTRIES AS NEW INVESTORS ESPECIALLY ON VALUE ADDITION
LINES OF CREDIT: $2B
JV PARTNERS: EQUITY, TECHNOLOGY TRANSFER, BUSINESS OPPRTUNITIES, INTERNATIONAL LEASING
INNOVATIVE LONG TERM FUNDIN
PROCUREMENT AND TRADE

9. 2. SECTOR: AGRICULTURE FORESTRY)
Plantations
Sawmilling
Value addition
Retailing and Wholesaling
Exports
companies

10. LOCATION OF THE PROJECT MANICALAND & MIDLANDS PROVINCE

11. COMPANY PROFILE 4.1.2 SAWMILLING 4.1.1 PLANTATION DEVELOPMENT
Allied Timbers Zimbabwe (Pvt) owns 60% of all the plantations in Zimbabwe. The Company maintains a 25 year tree cycle that enables it to harvest 30000m3 or m3 of round logs per month and per year respectively. Allied Timbers Zimbabwe is the market leader in providing timber products locally.
4.1.2 SAWMILLING
Allied Timbers Zimbabwe owns Erin Estate, Stapleford Estate and Nyangui Estate in Nyanga District, Chimanimani Estate and Gwendingwe Estate in the Chimanimani District of Manicaland. The Company operates a sawmill in each of the above Estates. At Cashel Estate the Company operates a mobile sawmill. In Nyangui Estate and Maswera Forest the Company has contracts for sawmilling with Indigenous Business Contractors. The expected pine timber production in year is m³ in year.

12. 4.1.3 POL MANUFACTURING
The Company produces 4000m3 of poles at Mtao and Ngungunyana Estate of which 2400m3 is treated at Mtao Estate while the balance of 1600m3 of raw poles is exported to Botswana per month.

13. ROOF TRUSSES MANUFACTURING
The Company operates roof trusses plants Zimbabwe and Botswana.
TIMBER RETAILING
The Company has six timber retail outlets in Harare, Chitungwiza, Gweru, Mutare, Masvingo and Bulawayo.

14. CHALLENGES FACING THE COMPANY
MARKETING
Exports markets to the region are mainly to South Africa, Botswana and Namibia. 50% of timber produced is exported while the remaining 50% is sold locally. In addition the Company has factories that produce roof trusses in Harare and Bulawayo, finger jointed timber at its Mutare Factory and treated poles at Mtao Estate. Export markets are more attractive because of the certainty of payment while poor liquidity in the local market results in customers paying their accounts late. Both local and exports markets are insatiable. The Company also retails its products in all major towns of Zimbabwe.
CHALLENGES FACING THE COMPANY
Ageing machinery resulting in high repairs and maintenance costs.
Long outstanding debts as customers are failing to service their accounts on time
Non availability of long term funding in the market
Working capital constraints 

15. LOAN FUNDING
The Company needs around USD7 million to modernize its four major sawmills.
Description
Units Required
Unit Cost
Total
Sawmill 4
USD600,000
USD2,400,000
Bell Skidders 10
USD200,000
USD2,000,000
Bell Telelogers 8
USD150,000
USD1,200,000
Roads Rehabilitation
4 sites
USD1,400,000
Grand Total
USD7,000,000
The Company will prefer a long term loan for 3-5 years at favorable interest rates below 9% per annum.
From the projected output of 120,000m³ in a year the company is expected to yield USD26,400,000 in year in terms of revenue.
Assuming that the cost of sales will be around 60% net profit will be around USD10,560,000
From the above it is quite evident that this is a very liquid project with a payback period of less than one year
Return on investment of more than 51% in the first year.

16. INVESTMENT OPPORTUNITIES
Lumber manufacture
Power Generation
Pulp and Paper
Exports
Machinery Supply
CCA/Creosote Imports
Charcoal Production
Particleboard manufacture
Furniture Manufacture
Forestry
Match Production
Small scale sawmilling
Construction – timber homes

17. ‘I am not smart, I spend more time on the problem than other people" - Albert Einstein
Dr. Joseph Kanyekanye – Group Chief Executive Officer
4th Floor Angwa City Building ,
Cnr Julius Nyerere Way and Nkwame Nkrumah Avenue
Harare, Zimbabwe
Landline : /71
Cell :
Website : 17